The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1887-06-25
NATIONAL BANKING.

NAflUNAL BANklNGs
The frightful failure of the Fidelity Ma
tional Bank and the arrest of its officers may
serve as lesson to the officers and directors
of national banks generally. There are about
5000 of these institutions in the United
States. with an aggregate capital of more
than $500, 000. 600, each and every one of
them under the stringent provisions of the
national bank law. This law framed to
insure safe banking system and to protect
the public in its dealings with the banks. To
this end the duties and liabilities of stock
holders, directors and officers in national
banks are clearly defined. The provisions of
the law are intended to hold them to strict
performance of their duty to the public and to
depositors, and its penalties directed
against violation of these duties. The di-
rectors and officers of a national bank need
have no fear of the law as long as they do an
honest, legitimate banking business, but they
can hardly swerve hairs breadth from that
line without mourning the penalties of the
law This is as it should be- The system is
so vast and so intimately interviewer with the
business interests of the country that it can
and officers, directors and stockholders should
understand that they are doing business under
a law which provides severe penalties for its
violation. They are all equally interested in
a strict observance of the law for any
violation of il may involve serious
III
contemplate such thing
figure-head president or ornamental directors.
The president is held to be the head of the
bank, with all that that implies, and the d.
their positions they take oath, the con-
scientious fulfillment of which requires them
to keep themselves fully informed as to the
operations of the bank. A who accepts
a dictatorship in national bank with the
idea OF leaving its management entirely to
others assumes a great risk. He assumes a
much greater risk if he knowingly permits
any violation of the law in the management
of the bank. Section 5239 of the law pro-
vides that every director who participated in
visions 'tshall be held liable in his personal
and individual capacity for all damages which
the association, its shareholders or any other
person shall have sustained in consequence of
tion 500, which says:
every president, director, cashier, teller,
clerk or agent of any association, who embez-
IL aLo<uo Fill II. e
the moneys, funds or credits of the associa-
ton, or who, without authority from the
directors, issues puts forth any
certificate of deposit. draws any order or bill
of exchange, makes any acceptance, assigns
any note, bond, draft, bill of exchange,
or who makes any false entry in any book,
report or statement of the association, with
intent in either case to injure or defraud the
association, or any other, to
deceive any officer of the association, or any
agent appointed to examine the affairs,
y shall be deemed guilty of a misdemeanor
and shall be imprisoned not less than five
years nor more than ten"
These and other provisions of the law are
intended to apply and do apply very closely
to all connected with the active management
of the bank, and, as before stated, the law
presumes that the president and directors
know what is going on. They are presumed
to know what they ought to know, and are
held responsible accordingly. This is right.
Bankers and bank managers assume fdu-
ciary position towards the public, and have
no right to complain if they are held to strict
accountability. 1t is not the least of the
many great merits of the national bank law
that it extends this principle of responsibility
to every person officially connected with
national bank.